Interstellar Marines crowdsourced funding not what it seems

Despite the potential of Interstellar Marines, it turns out that the game isn' …

Interstellar Marines hopes to buck the trend of small-scale independent games created on shoestring budgets. The title has been worked on by a dedicated team for a number of years and relies on a unique business plan: community members who are willing to pre-order the game fund development. The real story, however, may not be that simple.

A Danish journalist contacted Ars Technica to point out that Zero Point Software's financial history isn't as solid as it leads the public to believe, and the company's previous incarnation was shut down after declaring bankruptcy. Did we have the wool pulled over our eyes? The answer isn't a simple one, and those who chose to preorder need to know what they're getting into.

Before crowd-funding was an option

While community support is clearly a big part of the developer's funding plan—if for no other reason than it helps generate word-of-mouth buzz—it turns out that the company enjoyed significant support that wasn't community-based. Gert Haar-Jørgensen, one of the co-founders of Zero Point Software, largely carried the game's funding needs for over five years. According to his testimony on the Interstellar Marines forums, "the investors up til now are over 90 percent (amount and value) founders and their family and friends (some of the 500 fans on facebook) and the story of our on-going battle to realize the [Interstellar Marines] dream is well-described in the [For The Love Of The Game] video (there are a few additions in the pipeline)."

The indie developer began suffering financial difficulties last year. According to Haar-Jørgensen, his support financed roughly 80 percent of the game's development; he drew the available funds from the income of his other business, Lean Coaching. Due to the flailing economy, he lost a significant amount of business, leaving him unable to continue financing the game. The studio was shut down, and the Zero Point Software name, Interstellar Marines content, and intellectual property reverted back to a holding company while founders and board members tried to figure out what what to do next.

We followed up with Zero Point about the allegations, and game director/company cofounder Kim Jørgensen was forthcoming about the past. Ars was provided with a investor's brief, something that is available to anyone who preorders a copy of the first game or the entire trilogy. The brief does briefly mention that the prior incarnation of Zero Point Software went bankrupt, and explains how a new production company was established to license the development rights for the planned franchise from Zero Point Holding. As a result, the game was able to rise from its original developer's ashes, albeit with a much smaller team.

The current situation

"Our eight-man development team working on Interstellar Marines is currently funded by Gert and a few of his business associates on a bare minimum burn rate," Kim stated in a follow-up interview. "Right now, we are negotiating with potential investors to secure a budget [capable of supporting at] minimum a 12-month development, which will allow us to ramp up the core team with a few more people.

"The financial support from the growing community is currently primarily used to show our potential investors that people from all over the world are willing to support this development strategy, with more and more people joining with each released playable preview. It's important to the investors that our 'Sales Projections' calculated inside the 'Investor Brief' is proved, because it's a huge part of their decision to invest in Interstellar Marines. The fact is we haven't used a single dime of the revenue generated from the 'product sales' made on InterstellarMarines.com; we believe it's better to be safe than sorry."

Proof of content: it's there, we promise

So where did the original money go? Funding a 20-member studio team isn't cheap, nor is licensing the Unreal Engine for use in the game (this was before the developer went over to the Unity Engine). Because of an agreement with Epic Games, Zero Point Software is unable to display footage of Interstellar Marines running with the Unreal Engine, although Jørgensen let Ars see some videos from GDC 2008 when the technology was still in use.

The videos are impressive, though the game itself was kind of rough when they were made. Concerns have been voiced by some of the public about whether or not there's a viable product here—reasonable, since the most the general public has seen after five years of development is a website with a couple of Flash-like minigames—but these videos do a great job of showing off just how fast-paced and fun the game has the potential to be.

"We began an evaluation of Unity after GDC 2009," said Jørgensen, "which was when Epic Games declined our request to show our work building Interstellar Marines on UE3 to the public and we didn't have the money to pay for a full engine license. This was 6 months before Epic released the 'public' UE3 SDK."

In spite of this setback, salvation came in the form of the Unity Engine. "With the release of our first preview... made on Unity, called 'The Vault', Unity contacted us and offered to 'sponsor' a few months worth of pro licenses, during these hard times. We absolutely love Unity!"

After our second conversation with Jørgensen and the additional checking we did, it's hard to escape the conclusion that he wasn't totally forthcoming about where the company has been the first time he spoke with us. Indeed, Jørgensen made it sound like all of the funding for Interstellar Marines came from the game's community, a claim that is touted on the company's website.

It should be noted, though, that the company made a point earlier in the year of keeping the community informed about its financial problems. For a while, there was even an article on the official site about what was going on with the bankruptcy process, though it has since been taken down.

"The article... was called 'The current status of Zero Point Software' [posted in June 2009] and was released to give our community a transparent and very detailed description of the bankruptcy," Jørgensen explained. "The article has since been argued [as] irrelevant as it clouds our already challenging communication of strategy and commitment. We want to focus on the fact we are already letting people play preview slices from the game and the fact that we are completely committed to releasing much more playable content from Interstellar Marines as we develop the game."

Future plans for marines in space?

At the moment, it seems as though Zero Point Software has managed to bounce back from its problems last year. Things certainly appear much more stable than they were only six months ago, and development of the Interstellar Marines trilogy is once again underway. But what about concerns regarding the company's ability to stay afloat in the months and years ahead? After all, the world's economy seems better than it was a year ago, but times are still tough.

"We are working on the game full-time and have enough funding to negotiate with all our potential investors, while we deliver our next preview slice called 'Running Man,'" said Jørgensen. "We are very confident that with the investors aligned we can secure the capital needed to ramp up the team and the pace of the production. One thing is absolutely certain: we will never allow a bankruptcy again, nor will Nicolai, Gert and I (the three founders) give up bringing Interstellar Marines to all gamers out there."

Zero Point Software is clearly more solvent than it was six months ago. However, the only reason this is the case is that Gert Haar-Jørgensen and some colleagues have been able to reinvest with the studio. Reading through the company's investment brief, there seems to be a sound plan in place to continue the game's development, but more investor support will be needed to further stabilize things. Crowdsourced funding seems like a great idea, but it's a shame to see that it's currently not effective enough to fully support Interstellar Marines.

It should be noted that Zero Point Software has been very open about the situation from the moment we contacted Kim Jørgensen with follow-up questions. In fact, he let Ars see a great deal of information that was private to the employees and investors of the company. That Jørgensen was as willing to communicate with us—as well as the fact that Zero Point still has the information available on its forums—makes the situation far less dubious than it seemed when we were first notified of it.

20 Reader Comments

Pre-ordering a game that is about to go gold, from a reputable publisher (often with little perks) may make sense, but sending money to XYZ games on the basis that they may eventually someday produce the game seems a little risky.

If (and that's a big if) I ever did this, I would look at it more as a "contribution" to the game industry, and be pleasantly surprised if I ever got anything back.

It could world god knows I would pay out 200-2000$ over a few years to have something on the scale of bioshock, mass effect or fallout be made and be done right minus the shallow feeling of complexity and nothing of substance beneath the surface.

I mean as long as an SDK gets released with it at the very least its something that can be fixed by the community.

It would not hurt any to shell out 10X the price of the launch game to get 1 free copy, I mean its better than paying for the watered down caned crap we are mostly fed...uhg the game industry is now the music industry >< .

Why can't independent studios collaborate on the development of their own free to use open source game engine with a licence that enables them to charge for all the art assets, animation, level and sound design. After all, it is the latter part that we are paying for.

All I can think is that they either are ambitious (and want their game to have slick screenshots rather than look stylishly retro), or are just plain greedy (and don't want to risk their consumers legally modding it and create something that competes with their own sequels - of course, if their stuff was original they shouldn't have to worry about this).

Crowdfunding can feel like a scam but seed-capital investing has never been for the faint of heart. Essentially, the only real difference is that instead of having one or two shareholders into your company for alot of money each, you have hundreds or thousands of stakeholders. In the USA, you can't offer any sort of dividend, stipend, stock, warrant or option for the cash. Any crowd funded investment is viewed as a "donation" making the individual, but smaller, investment even more risky to the investor than traditional venture capital or angel money. You're essentially giving them money without any recourse if they never give you back something for it; hence the scam feeling. Venture capitalists get preferred shares, liquidation preferences and voting board seats to help them ensure a return for their money. As an crowdfunding "investor" you get a promise.

If Zero Point Software makes good on the promise then there is no scam and your worrying was for nothing. If they fail, you'll feel like you were scammed out of your money. A promise is all it is and nothing more unless German investment laws allow more than US SEC laws do.

the problem is expectations and the delivery timeline. The technology behind a game has a 5-year shelf-life max. A small team trying to make a big game is going to inevitably provide something behind the graphics curve, if not the gameplay curve.

So long as those investors do not interfere in the game design, that's absolutely fine with me and the rest of the IM community, in fact, we've pretty much known about this for a long time.

Investors are a more viable option than a publisher because they have less power and don't really sign any sort of contract with the company, as far as I know. They only vote on how the company should proceed so they can hopefully get their money back.

As much as we would like to purely fund it ourselves, the IM community realizes that the idea of purely funding from the community is unrealistic. You HAVE to have more major investors to provide a big chunk of funds, at least in the beginning, to get the game on its feet, because people do not want to support a game when there is not enough content. Also, in a way, they are part of the community as well, whether they're interested in the game itself or not.

I don't think they've been dubious about it, the original thread where the backruptcy talk started is still up to this day and it is a sticky and they don't want to slap new members with pessimism when they visit the site.

Originally posted by jwill:Typo(?): "Due to the flailing economy" ("fLailing" meant to be failing?)

"Everything is fine!""We are seeing trends indicating a recession""There is no economic issue.""Unemployment is increasing""Minor fluctuations in the economy are normal!""The banks are failing""There is no problem, and I don't need to drop from my interview with Letterman to Save The Economy!""More banks are failing, and so are major industries like auto manufacturers""Everything is fine, we can help them out. Not a problem, nothing to see here, the old geezer just flipped out over nothing.""Wall Street crashed""Yup, it's pretty bad.""Unemployment worst in 100 years""It's recovering! See ... over there! Yup! Healthy as usual! We saved the US! Yaay us!""Unemployment barely changed, and is still dismal""Stop talking people down. Its all great! Spend spend spend! Lots of hope for the future. Go spend.""We ain't got no money!"

That said, I don't see this like an "investment" into something to increase my massive pool of personal funds. It's an "investment" in the same way some people say "What do you mean my MMORPG is shutting down?!?! What happens to my time investment?!?!".

It's a donation into a project that looks like it could be fun or helpful or whatever. Maybe it works out, maybe it doesn't. The "risk" portion is obviously there, and substantial. That doesn't mean it shouldn't be invested in; it means the risk should be smaller and more shared between a larger group of people. The reward is also lesser; its the game (in this case) that hopefully is produced in the end.

The good things about this could be that "investors" are part of the design of the game. It's something like pre-purchasing a game in order to be part of a closed Beta. The cost of the game might be small compared to the fun of being part of the evolution of the game.

But, like all things, someone could just be after the money. What I would want isn't so much "did they go bankrupt in the past", as "did they have criminal charges pressed against them". Bankruptcy is not really relevant since game development is risky, as are many tech projects. Henry Ford went bankrupt, it's not that he should never have done business again.

What I would look for is proof of progress in the project. If you see it evolve and grow over time, then I think it's unlikely to be a scam. But, it might also never be completed in which case you are not going to get anything for your "investment".

Personally, I prefer to donate smaller amounts over time. I like to put in $10 here and there, based on how the project is going.

Originally posted by Uncompetative:Why can't independent studios collaborate on the development of their own free to use open source game engine with a licence that enables them to charge for all the art assets, animation, level and sound design. After all, it is the latter part that we are paying for.

All I can think is that they either are ambitious (and want their game to have slick screenshots rather than look stylishly retro), or are just plain greedy (and don't want to risk their consumers legally modding it and create something that competes with their own sequels - of course, if their stuff was original they shouldn't have to worry about this).

I don't know what "stylishly retro" means or how it pertains to the engine (any engine worthy of the name can look however its user wants). But there are many open-source game engines on the "market", as it were. They aren't used seriously in the industry because buying a real engine gets you support. And support is more important for shipping a game without horrific bugs than getting a foreign codebase that nobody on your team understands that may or may not have bugs in it.

You always get what you pay for. Most "free" engines will cost more over time than the ones you have to buy.

Originally posted by Kressilac:Crowdfunding can feel like a scam but seed-capital investing has never been for the faint of heart. Essentially, the only real difference is that instead of having one or two shareholders into your company for alot of money each, you have hundreds or thousands of stakeholders. In the USA, you can't offer any sort of dividend, stipend, stock, warrant or option for the cash. Any crowd funded investment is viewed as a "donation" making the individual, but smaller, investment even more risky to the investor than traditional venture capital or angel money. You're essentially giving them money without any recourse if they never give you back something for it; hence the scam feeling. Venture capitalists get preferred shares, liquidation preferences and voting board seats to help them ensure a return for their money. As an crowdfunding "investor" you get a promise.

If Zero Point Software makes good on the promise then there is no scam and your worrying was for nothing. If they fail, you'll feel like you were scammed out of your money. A promise is all it is and nothing more unless German investment laws allow more than US SEC laws do.

Well anyone has to go into it with the sense of this is a investment on a possible project that at the most for all the money I give it I will maybe get a game out of it and if I am lucky I wont have to buy said game.

Sign a contract on a fee lines that this is a investment in a media project that has a 70% chance or so to fail if the project takes to long or fails you can not sue,ect to get any money back. I'd be happy to toss 2K into it over 2-5 years, not go from 1-2000$ apply that by 100K investors you can get money out of this process that may well be enough to do a game then you can always have another contract and help them with development/testing for free or even make that a subscription of 5$ a month.